Panoramic cameras provide a convenient way to capture a 360 degree field of view with a single camera. Cameras of this type are very useful for surveillance and security applications. Such a system is disclosed in U.S. Pat. No. 7,071,964 (360-Degree Panoramic Scene-Storage Device), and is incorporated herein by reference. The images acquired from such a camera usually require additional image processing to provide a dewarped “rectangular” image that is more easily viewed by a human. As there is an ever increasing need for security and surveillance, it is desired to have an improved system and method for the handing of panoramic images.